You wouldn't build a high performance car on the side of the M25, and so why would you build a plantroom on a construction site? asks Richard Strode, the new managing director of Armstrong's UK HVAC business.
When I interviewed him he had been a mere seven weeks into his job but, having spent much of that time talking to clients, he already had a handle on his markets.

And he has realised the opportunities and challenges for Armstrong in the energy market.

The company's portfolio ranges from single pumps right up to pre-frabricated plantrooms, integrated plantrooms, integrated chiller rooms and the controls to make them as energy-efficient as possible.

'Armstrong personnel can virtually offer clients a guarantee that the solution will be more energy-efficient than they have at present - and provide the data to prove it.'

A recent installation for Lancashire constabulary has proved how successful the strategy can be. The data shows a saving of £245,000 a year on the previous installation.

This month the organisation has merged its two UK companies, Armstrong Holden Brooke Pullen Ltd and Armstrong Integrated Systems Ltd into one, Armstrong Integrated Ltd with a new strapline, 'Making Energy Make Sense'.

This way, says Strode, Armstrong will present one face to the market.

Apart from the back office synergy, it means Armstrong has the ability better to communicate that it is more than just a pump company.

I visited him at the Halesowen plant where he showed off the factory where engineers were building pre-fabricated plantrooms of varying shapes and sizes.

'The whole point of the restructuring is to reposition Armstrong as an energy solutions provider '

Of course, it means re-educating the salesforce to sell the worth of the solution rather than just the individual components, adds Strode.

'When you reposition you also need to look at your skills base. Take the salesforce, for instance. Many have been selling into a commodity market for years but now the sale will involve financial models, and value-adds to the customers' bottom line.'

This will require a multi-tiered sales strategy with a sales organisation that can operate at different levels of the market. And for Armstrong it doesn't stop there.

'A big slice of research and development will be going into making our systems even more energy-efficient so that we can offer our customers even more added value.'

By merging the workforces of Manchester, Halesowen and Redhill, the company will have all the benefits of the different work skills - and flexiblity.

Full integration

Armstrong is working towards full integration of its activities both internally and externally. If the integrated plantroom model continues to grow, then Strode wants to be able to use not only the Halesowen factory but the Manchester factory as well. And better use of the facilities will mean some of the peaks and troughs can be smoothed out. Strode is conscious that local businesses need to think local.

'It is about stimulating local economies. The two current factories are in areas where a lot of the clients are based and where there is a skilled workforce and recruits.'

But for now, top of the list is the restructuring and repositioning.

And, hopefully, he expects the Armstrong brand to be synonymous with solution provision within six to 12 months time.

The controls division within the business is also a key element to support the repositioning in the drive for Armstrong to be recognised as an energy solutions provider.

'Our controls solution allows us to take the data from the plant and provide our clients with performance data to support their energy management activities.'

The controls element provides Armstrong with the flexibility to offer its customers a complete solution either on a stand-alone basis where each piece of the plant will be finely tuned individually, or as part of a site Building Management System where it can seamlessly integrate and provide plant performance data for use as part of the site-wide energy and carbon reduction activities.

Strode sees a great opportunity for Armstrong pre-fabricated plantroom solutions in sectors such as healthcare.

He believes that while there will be a major slow down on building new hospitals, energy costs will increase as will maintenance costs on existing buildings.

'The products and services we offer could have a vast impact on reducing energy costs and improving system availability.'

Again, this will come down to a selling job.

'Our products and services reduce energy costs (and our controls prove it) so hospital executives can make a financial decision based on costs and payback periods.'

And Strode says Armstrong is reviewing a number of financial models should the healthcare trusts want to take advantage of this.

He says it is a case of the client and Armstrong looking at the problem together and then finding the solution.

This may also involve other partner companies, such as those which supply renewables, controls companies and IT firms.

'We would go into a company, audit the equipment, identify the opportunities and put forward our recommendations.'

CHP solution

He cites an organisation which had a CHP machine which was broken and would cost too much to repair and was therefore paying too much for its electricity. While Armstrong did not supply CHP machines, one of its partners did and Armstrong could support the complete solution. For the future, there will be two approaches to the marketplace.

'One is our traditional approach where the salesforce sells pumping products to our core clients, such as m&e contractors albeit trying to explain the repositioning as well. The other approach is to target both private and public sector end-users directly based on the energy and carbon reduction benefits our offer can deliver'

'Once the scope of the solution has been defined, specific to the customers needs, then by stepping into what might be considered as non core markets, Armstrong can offer a solution - and by adding controls and IT, we can provide the financial proof that customers need.'

Strode says that the financial side is just one aspect of what puts the company ahead.
He adds that the traditional market - selling energy efficient pumps and other core products - is supporting Armstrong's transition into the new solutions market for the next couple of years.

Or maybe it will not take a couple of years. He highlights market studies which suggest there is a £2 billion backlog of maintenance in the NHS.

'Don't forget that hospitals are targeted on patient waiting lists, recovery time etc rather than on plant maintenance but this will catch up with them.'

Eventually, he says, healthcare trusts, for instance, will have to spend on facilities or lack of maintenance will impact on those up-front targets.

Some forward thinking companies are already embracing the new technologies. Major property developers, for instance, are displaying Energy Performance Certificates in all of their buildings. It is, says Strode, a brave move especially as some building performance levels are probably below what the company would want. But it is a start, he says.

Strode has started as he means to go on. There is a lot to do on Armstrong's repositioning. But the structure is in place and the plans are made.

I suspect that he will take Armstrong up several notches in the stakes and that's just for starters.

Tapping into the expertise of partners

Armstrong, being a family-owned company, has the flexibility to buy into new sectors if it needs. But Strode says partnerships are also a way to go.

'Companies we deal with have usually made vast commitments in their area of expertise. By partnering we can tap into that expertise. But there could come a time when Armstrong might want to acquire a partner as it has done in the past.'

Strode does not rule anything out. 'At this time, companies have to be agile and open-minded but also challenge everything they do to exploit any market.'

Technology moves on

Armstrong is a Canadian firm, now being run by the third generation of the family.

'I have been here only seven weeks but already I have had several sessions with Charles Armstrong,' says Strode. And the key messages received were centred around the need for Armstrong to consider the benefits of the whole offer rather than just individual elements when talking to customers and also the need to leverage the Armstrong expertise from across the globe.

So are there new products which might be coming from other countries to boost the UK portfolio?

Strode suggests the traffic flows both ways with the UK playing a key role in terms of innovation and often other countries are following our lead. For instance, the UK was the first to offer pumps with integrated drives. Now it has been taken up by the US.

'It has been done this way for years and it works so why change it?'

Answering his own question, Strode says the world and technology moves on and we cannot afford to be hidebound by tradition. India and China as emerging nations will not be bound by our traditions, he insists.